Bangkok: US President Barack Obama has lifted a decades-old arms sales embargo to Vietnam on Monday during his first visit to the communist country.
The decision announced at a news conference in Hanoi will anger China at a time of heightened tensions over the flashpoint waters of the South China Sea.
Mr Obama said his three-day visit to Vietnam "allows us to reach a new moment" in the United States' relationship with the South East Asia nation four decades after the end of the Vietnam War.
"The United States is fully lifting the ban on military equipment to Vietnam that has been in place for 50 years," he said.
Mr Obama said the move was aimed at normalising relations between the two countries and eliminating a "lingering vestige of the cold war".
"At this stage both sides have developed a level of trust and co-operation," he said.
Vietnam argued lifting of the ban would enable it to further modernise its armed forces to counter the growing power of China. The US had partially lifted the ban in 2014.
Prior to Mr Obama's arrival in Hanoi, China accused the US of driving tensions between Beijing and south-east Asian nations to turn the South China Sea into a "disturbing" regional hotspot.
Xu Bu, China's ambassador to the 10-member Association of South-East Asian Nations (ASEAN), said the US was "dictatorial and overbearing" and not always practising democracy in its international relations.
"It is no coincidence that the changes in US policy have been followed by some south-east Asian countries making changes to their policies on the South China Sea issue," Mr Xu wrote in Singapore's Straits Times.
"The tension in the South China Sea was intentionally churned and hyped," he wrote, adding the US actions would divide regional nations.
Tensions are high over China's aggressive claim to almost all the flashpoint waters of the South China where US$5 trillion ($7 trillion) of trade passes each year.
Mr Obama's three-day visit to Vietnam four decades after one of the most divisive wars in American history is aimed at reinforcing his country's strategic "rebalance" towards Asia to counter China's growing power in the region.
"Nobody has any illusions," said Evan Medeiros, Mr Obama's former top Asia adviser.
"This trip sends important signals to China about US activism in the region and growing US concern about Chinese behaviour."
Over the past two years China has built seven artificial islands in the South China Sea and equipped them with airstrips, radar and ports staffed by thousands of workers and soldiers.
Mr Obama is also due to visit Japan later in the week to build stronger economic and security ties with its World War II enemy which also is locked in a bitter territorial dispute with China.
The waters are also claimed in part by Malaysia, Taiwan and Brunei.
Mr Xu's comments are part of a diplomatic and public relations blitz by Beijing in recent weeks to rally support for its maritime claims ahead of a decision by a UN-backed court that is expected to rule against China.
Chinese officials have indicated that Beijing would not abide by any unfavourable court ruling.
"China is a strong supporter of rule-based international law," Mr Xu said.
"However, the international rule of law is what the entire international community follows, not a tool to be exploited by a handful of countries to pursue their political agenda," he said.
Mr Obama, who made forging closer diplomatic and military co-operation with countries across Asia and centrepiece of his presidency, is set to meet Vietnam's communist leaders in Hanoi and will visit southern Vietnam, evoking searing images for many Americans of a final frantic US airlift as the war ended in defeat in 1975.
Mr Obama is being accompanied by US Secretary of State John Kerry, who after a tour in Vietnam as a young navy officer became a protester against the war.
with agencies
